Airbnb & VRBO Performance in Honolulu Hawaii.

Short-Term Rental Regulations in Honolulu, Hawaii for 2024

Background and Current Status

• Minimum Stay Requirements:
• Despite a 2022 law aiming to increase the minimum stay to 90 days, a federal court ruling has reverted the minimum stay back to 30 days for existing short-term rentals. However, new regulations and zoning changes may still enforce a 90-day minimum in certain areas.

Zoning and Location Restrictions

• Resort-Zoned Areas:
• Short-term rentals are permitted in resort-zoned areas such as Waikiki and Ko Olina.
• Residentially Zoned Areas:
• Properties in residentially zoned neighborhoods are subject to a minimum stay of 6 months. Counties have the authority to phase out short-term rentals in these areas.

Tax Obligations

• Transient Accommodations Tax (TAT):
• Short-term rental income is subject to the state TAT (10.25% on stays under 180 days) and the Oahu TAT.
• General Excise Tax (GET):
• Operators must pay the GET on gross rental proceeds.
• Business Licenses and Taxes:
• Short-term rental operators must have a business license and pay relevant taxes, including raised real property tax rates to business rates.

Compliance and Enforcement

• Registration Requirements:
• Hosts must register with the state’s Department of Taxation and include their TAT ID number in all advertisements.
• Health, Safety, and Building Codes:
• Properties must meet all health, safety, and building codes.
• Local Contact Information:
• Hosts must provide local contact information to guests and neighbors.
• Fines for Non-Compliance:
• Violations can result in fines of up to $10,000 per day.

County-Level Regulations

• County Authority:
• Counties have the power to regulate the time, place, manner, and duration of short-term rentals through zoning regulations. They can phase out short-term rentals in residential and agricultural zones.
• Non-Conforming Use Permits:
• Existing short-term rentals with non-conforming use permits may continue to operate, but counties can phase out these permits over time.

Economic and Housing Considerations

• Impact on Housing:
• Regulations aim to increase the availability of long-term housing for local residents by limiting short-term rentals in residential areas.
• Economic Impact:
• Stricter regulations could impact county and state revenue from the Transient Accommodations Tax, as short-term rentals contribute significantly to tourism revenue.

Top Airbnb Revenue-Generating Neighborhoods in Honolulu, Hawaii

1. Waikiki

• Average Occupancy Rate: 78%
• Average Daily Rate: $245
• Estimated Annual Revenue: $69,800
• Appeal: Waikiki is the most popular tourist destination in Honolulu, known for its world-famous beach, vibrant nightlife, and abundant shopping and dining options. It attracts millions of visitors each year, making it an ideal location for high-revenue Airbnb listings.

2. Waikiki and Surrounding Areas (including Diamond Head)

• Average Occupancy Rate: 89% (for broader Honolulu area)
• Average Daily Rate: $173
• Estimated Annual Revenue: $53,000
• Appeal: The area around Waikiki and Diamond Head offers stunning ocean views, proximity to beaches, and easy access to Honolulu's main attractions. These factors contribute to high occupancy rates and significant revenue potential.

3. Kakaako

• Average Occupancy Rate: 70%
• Average Daily Rate: $200
• Estimated Annual Revenue: $51,100
• Appeal: Kakaako is an up-and-coming neighborhood with a vibrant street art scene, trendy restaurants, and proximity to popular attractions like Ala Moana Beach Park and the Ward Village shopping center. This makes it attractive to tourists looking for a mix of culture and convenience.

4. North Shore

• Average Occupancy Rate: High, though exact figures vary
• Average Daily Rate: Generally lower than Waikiki but still lucrative
• Estimated Annual Revenue: Significant due to high demand
• Appeal: The North Shore is famous for its stunning beaches, laid-back vibe, and world-class surfing. Attractions like the Polynesian Cultural Center, Waimea Valley, and the charming town of Haleiwa draw tourists seeking an authentic Hawaiian experience.

5. Hawaii Kai and Kahala

• Average Occupancy Rate: High, with Kahala often above 80%
• Average Daily Rate: Premium rates due to luxury appeal
• Estimated Annual Revenue: High due to luxury and high demand
• Appeal: Hawaii Kai and Kahala offer a luxurious and serene atmosphere, with Kahala boasting prestigious estates and Hawaii Kai providing access to world-class beaches and resorts. These areas are attractive to those seeking upscale accommodations and exclusive living.

These neighborhoods are highly appealing to guests due to their unique blend of tourist attractions, cultural experiences, and the quintessential Hawaiian lifestyle, making them prime locations for generating significant Airbnb revenue.

Furnishing and Design Tips for an Inviting Airbnb in Honolulu, Hawaii

Choose a Tropical Aesthetic

• Select a theme that fits the tropical atmosphere of Honolulu. Incorporate colors and natural elements that complement the beautiful outdoors, such as earth tones, tropical woods, and floral patterns that are subtle and not overly bold.

Use Quality and Durable Furniture

• Invest in good quality furniture that can withstand multiple guests and the wear and tear associated with a beachside location. Opt for pieces with clean, classic lines that will remain stylish over time.

Add Finishing Touches

• Include details such as throw pillows, matching carpets and drapes, and ornaments or books on shelves to make the space feel like a home away from home. These touches can enhance the comfort and coziness of the rental.

Incorporate Local Elements

• Consider incorporating elements that reflect Hawaiian culture, such as furniture crafted by local artisans or traditional Hawaiian decor. This can give your vacation rental an authentic and unique feel.

Ensure Compliance with Local Regulations

• While focusing on design, remember to comply with local building and housing standards. Ensure that your rental meets all health, safety, and habitability regulations set by the City and County of Honolulu.

Maintain a Balance Between Style and Comfort

• Strike a balance between creating a stylish space and ensuring it remains comfortable for guests. Avoid loud or polarizing statement pieces and opt for understated art and decor that appeals to a wide range of people.

Consider the Long-Term

• When decorating and furnishing, think about the long-term durability and style of the pieces. Avoid short-lived trends and focus on timeless designs that will not need frequent updates.

Highlight Natural Beauty

• Since Honolulu is known for its beautiful natural setting, design your space to make the most of this. Use large windows, outdoor seating areas, and decor that brings the outdoors in to enhance the tropical ambiance.

Local Attractions and Insider Tips for Visiting Honolulu, Hawaii

Must-Visit Attractions

1. Waikīkī Beach

• One of the most recognizable beaches in the world, once a playground for Hawaiian royalty. Enjoy sunbathing, surfing, and stunning views.

2. Lē‘ahi (Diamond Head)

• Hike to the top for panoramic views of Waikīkī, Honolulu, and the Pacific Ocean. Best to hike early to avoid crowds and heat.

3. Nuʻuanu Pali Lookout

• Offers breathtaking views of the Windward Coast and the Koʻolau Mountains. A must-visit for scenic enthusiasts.

4. Pearl Harbor

• A historic site honoring the sacrifices of America’s Armed Forces. A significant cultural and historical landmark.

5. ʻIolani Palace

• The only royal palace in the United States, offering tours and insights into Hawaiian history and royalty.

6. Honolulu Museum of Art

• Features various art exhibits, pop-up installations, and a summer nights program with live music and hands-on workshops.

7. Hanauma Bay

• A Natural Reserve and Marine Life Conservation District with excellent snorkeling opportunities to see over 400 species of fish.

Neighborhoods to Explore

1. Downtown Honolulu and Chinatown

• Centers for government, business, and arts, with vibrant dining and nightlife scenes.

2. Kapahulu

• Known for eclectic shops and some of Honolulu’s best local food, including plate lunches and poke.

3. Haleiwa

• A charming surf town on the North Shore with a laid-back atmosphere and local eateries.

Insider Tips

1. Sunset Spots

• China Walls: A popular spot for sunset, but beware of the dangerous ocean swells. For a quieter spot, walk to the reflection pool on the south side.
• Tantalus Drive-up Lookouts: Puʻu ʻUalakaʻa State Park and other spots along Tantalus offer stunning sunset views.

2. Local Dining

• Duke’s Beach House: Enjoy barefoot fish tacos in Waikīkī.
• Alan Wong’s Restaurant: Sample fine Hawaiʻi Regional Cuisine.
• Moke’s Bread & Breakfast: A local favorite for breakfast in Kaimukī and Kailua.

3. Outdoor Activities

• Kayaking to the Mokulua Islands: Accessible by kayak, these islands offer a surreal kayaking experience and opportunities to spot seabirds, turtles, and monk seals.
• Magic Island: A man-made peninsula perfect for picnics, Frisbee, and enjoying the sunset.

4. Shopping and Markets

• Waikīkī and Ala Moana: Free trolleys connect these areas, offering over 290 shops and 80 dining options. Look for local boutiques and high-end fashion labels.
• Farmers Markets: Explore local farmers markets for fresh produce, plate lunches, and poke.

5. Cultural Experiences

• Flower Crown Making: Visit Paiko in the Kaka’ako neighborhood for a flower crown-making session using fresh, locally sourced flowers.
• King Kamehameha I Statue: See the bronze statue draped with flower garlands on the Friday closest to Kamehameha Day (June 11).

Additional Tips

• Transportation: Rent a car to get around Honolulu and explore the island.
• Events and Festivals: Check local calendars for festivals and performances at places like Magic Island and other parks.
• Conservation and Learning: Participate in camps and learning programs at the Honolulu Zoo and Sea Life Park to support marine life conservation.

Practical Tips to Run a Successful Short Term Rental Business in Honolulu, Hawaii

To operate a successful short-term rental business in Honolulu, Hawaii, several practical tips can help you navigate the stringent regulations and enhance the guest experience.

Noise Regulations and Quiet Hours

Inform your guests about noise regulations and quiet hours to avoid any potential issues with neighbors. Include clear guidelines in your digital and physical house manual, emphasizing the importance of respecting the local community.

Comprehensive House Manual

Create a detailed digital and physical house manual that includes essential instructions, such as Wi-Fi passwords, appliance usage, and emergency contact information. This manual should be easily accessible to guests, either through a welcome packet or a digital link provided upon booking.

Simplified Check-in Process

Utilize smart locks to streamline the check-in process, eliminating the need for physical key exchanges. Provide guests with a unique access code and detailed instructions on how to enter the property. This not only enhances convenience but also reduces the likelihood of lost keys.

Parking Instructions

Include parking instructions with photos in your house manual to help guests navigate any complex parking situations. Clear directions and visual aids can prevent confusion and ensure a smooth arrival experience.

By adhering to these tips, you can ensure compliance with local regulations, improve guest satisfaction, and maintain a positive reputation for your short-term rental business in Honolulu. Always stay updated on the latest regulations and best practices to continue operating successfully in this highly regulated market.

Here is a brief list of house cleaning providers in Honolulu, Hawaii:

House Cleaning Services

Maid In Oahu

• Provides professional house cleaning services in Honolulu.
• Known for reliable and trusted service, with a 100% guarantee on cleanliness.

Hawaii Natural Clean

• Offers eco-friendly deep cleaning, residential, vacation rental cleaning, carpet cleaning, and post-construction cleaning services across Oahu and Maui.
• Uses natural products and has background-checked cleaners.

The Maids in Honolulu

• Provides high-quality residential home and apartment cleaning services.
• Uses the 22-step Healthy Touch® cleaning system and offers various cleaning services including housecleaning, apartment cleaning, spring cleaning, and window cleaning.
• Fully licensed and insured, with a 100% guarantee on their services.

The Home Team Cleaning

• Offers professional house cleaning, blinds, and carpet cleaning services.
• Emphasizes health and safety measures, and provides competitive pricing with no hidden fees.
• Serves various areas across Oahu.

Additional Resources

For more options, you can also refer to the list of 107 affordable house cleaning services in Honolulu provided by Care.com, which includes various local listings and reviews.

Short-Term Rental Management Fees in Honolulu, Hawaii: A Comprehensive Guide

In Honolulu, Hawaii, the fees for managing short-term rentals can vary significantly, typically ranging from 10% to 30% of the rental revenue, depending on the level of service provided. Full-service management, which includes comprehensive services such as guest communication, marketing, property maintenance, and financial reporting, tends to be on the higher end of this spectrum, often around 20-30% of the rental income.

Basic services, which may only include listing creation, booking management, and minimal maintenance, can be more affordable, starting at around 10% of the rental revenue. Additionally, property owners may incur extra fees for specific services like cleaning, repairs, or interior design, which can further impact the overall cost of management.

Understanding these fee structures is crucial for property owners to make informed decisions and ensure they are getting the best value for their investment in the competitive Honolulu short-term rental market.